TransDigm is back in the market with a $550 million offering of eight-year (non-call three) subordinated notes, and a $200 million add-on to the recently priced 6.25% secured notes due 2026, sources said. Pricing for the deal is expected today, Feb. 1.
Joint bookrunners for the secured debt are Morgan Stanley, Credit Suisse, Citi, Barclays, RBC Capital Markets, Credit Agricole, and KKR Capital Markets. Bookrunners for the senior subordinated paper are Morgan Stanley, Credit Suisse, KKR Capital Markets, Citi, Barclays, and RBC Capital Markets. Existing ratings are B+/Ba3 for the secured debt, and B–/B3 for the subordinated notes.
Proceeds of the new subordinated notes are earmarked to redeem the borrower’s $550 million outstanding of 5.5% notes due 2020, according to an offering memorandum. The funds raised from the tack-on secured bonds will support the company’s acquisition of Esterline Technologies.
TransDigm earlier this week placed the initial print of the 6.25% secured notes due 2026 supporting the Esterline buy, as a $3.8 billion transaction. Final terms were set at par. The offering was initially proposed to include $1 billion of senior subordinated notes, which were subsequently removed, with that amount steered to the secured tranche and an additional $100 million tacked on. These notes closed the session on Thursday, Jan. 31, at 101.75, yielding 5.85%, trade data show. Trades recorded this morning show the bonds changed hands at 101.25, for a 5.96% yield.
TransDigm is a designer, producer, and supplier of highly engineered aircraft components. – Jakema Lewis
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